Stand by for biggest Holden discounts ever

Holden dealers are expected to shut up shop by August and will offer unprecedented runout deals before then, carsales has learned.

Dealers won’t know the extent of the discounts they will be able to offer until later this week, when Holden will also reveal its compensation plan for the early axing of dealer franchise agreements, most of which were due to expire at the end of 2021.

Holden has cancelled all advertising as part of a media blackout but is expected to invest in a final runout campaign before the planned exit of all dealer stock and staff by mid-year.

The closure of Holden’s 200-plus dealerships is being fast-tracked in the wake of yesterday’s announcement by General Motors that it will exit all right-hand drive markets including Australia, New Zealand and Thailand by 2021.

Savings of anywhere between $1000 and $10,000 are expected across the Holden range, including the Colorado ute and the Trax, Equinox, Acadia and Trailblazer SUVs, plus the already discontinued Commodore and Astra.

Holden’s final runout deals may also extend to customers who have signed a sales contract but are yet to take delivery, and who therefore may be able to negotiate a new drive-away price.

However, RedBook.com.au data services director Ross Booth said reduced prices will have a direct impact on resale values of those models.

“If those new Holden vehicles are discounted in price, there is a strong correlation to the used pricing of the same model also decreasing. Why would you buy a used car for the same price when the new one has just decreased by $X?,” said Booth.

“It remains to be seen how many new cars Holden has to sell, who they will be sold to and how much they will be discount, all of which will impact the supply and demand and the pricing of used vehicles.

“There may be some new car bargains to be had in the Holden sell-out, just be aware of potential depreciation impacts on your used car, which becomes less the longer you keep it.”

Holden has stated it will honour all of its statutory aftersales obligations to owners by retaining 200 of its 800 staff to ensure parts and service back-up, plus warranty claims and recall actions and for the next 10 years.

But Booth said the axing of Holden as a brand will also impact the resale prices of some – but not all – models.

“Historically in the Australian market when a brand no longer sells vehicles, the perception is the brand is no longer supported, increasing the risk of purchase and negatively impacting demand for used vehicles thereby impacting the price,” he said.

“The reality is that parts, servicing and warranty in the market continues for used vehicles so there should be no rational impact on used pricing, just the impact of consumer demand and supply.

“When vehicles are no longer made and supply ceases, used prices may go up if there is strong demand, which was seen with the Australian-made Holden Commodore V8s.

“With new Holdens no longer available, the demand for an ‘Australian-made Holden Commodore’ may increase and therefore the value may increase, despite production stopping some time ago.”

More generally, Booth said the future values of used Holdens will depend on supply and demand, both of which remain unknown at this stage.

“The price of used vehicles is dictated by demand and supply, in this case of new Holden about to be sold. It’s unknown how many new Holdens built in 2019 and how many built in 2020 but still coming to Australia need to be sold to private and fleet customers.

“We will see demand and supply impacting pricing of used cars in the months to come, but there will also be an impact pricing around the perception of risk that used cars will be worth less.

“This may drive customers – both dealers and retail – to buy used Holdens immediately at reduced prices to cover a perceived pricing risk in future, so the market will decide.”

GM said killing off Holden in Australia and NZ and offloading the Thai factory that produced the Colorado ute and Trailblazer SUV to Great Wall Motors would cost about $1.1 billion.

Holden will pay redundancy packages for 600 sales, marketing, finance, design and engineering staff, and has also offered confidential counselling services by external experts to dealer staff.

The axing of Holden comes 160 years after the brand was established in South Australia as a saddlery, 71 years after it produced its first homegrown vehicle, 61 years after its record sales year, two and a half years after it ceased manufacturing and just two months after it axed the Commodore and became an SUV and ute company exclusively.